Fate of Chrysler's bankruptcy and hundreds of dealers depends on ruling from federal judge.
NEW YORK -- The federal judge in Chrysler LLC's Chapter 11
case could decide [today] whether the automaker can pull its choice assets - its best-performing factories and
dealerships - out of bankruptcy and sell them to a newly-formed incarnation of itself, called Chrysler Group. But
not everyone is happy about it. The strongest opposition comes from the auto dealers who resent being left behind.Source: CNNMoney.com

Chrysler has suffered few of the problems some predicted before it filed for bankruptcy. If the sale [of its assets to a new entity led by Italy's Fiat] is approved, Chrysler is expected to move quickly to close the transaction and reemerge as a new entity. But Chrysler's bankruptcy case could continue for years as other stakeholders such as dealers resolve their claims. Source: The Washington Post

General Motors Corp. said it won't proceed with the repurchase any of the $27.2 billion of notes it sought, saying
bondholder interest was far below the 90% threshold it was looking for. The company
could file for bankruptcy before a government-imposed Monday deadline to reorganize itself into a viable company.Source: The Wall Street Journal

DETROIT — In better times, many employees of General Motors called their company “Generous Motors” because of its
rich benefits. Now G.M. may stand for something else: Government Motors. The latest plan for the troubled
automaker, which is expected to file for bankruptcy by Monday, calls for the Treasury Department to receive about
70 percent of a restructured G.M.Source: The New York Times

Chrysler’s May sales were similar to those in April, showing consumers have taken President Barack Obama at his
word that he intends for a retooled company to survive, [a person familiar with the matter said]. That leaves
consumers feeling more optimistic that if GM goes through a similar [bankruptcy] process, warranties and service will be
provided, the person said yesterday. Source: Bloomberg

Goal: Stay in the car business, use the building
Steve Biegler's family-owned Aberdeen, S.D., dealership has been through automaker shutdowns before. Biegler is
one of many dealers who say they — very reluctantly — likely will reinvent themselves as used-car dealers after
being cut off by bankrupt Chrysler LLC. About 10 percent of the 960 franchise dealerships that exited the industry
last year converted to used-car sales only, says Paul Taylor, chief economist at the National Automobile Dealers
Association.Source: Automotive News

Just when many state governments are weeks away from the start of another budget year, a new crisis has emerged
that threatens their finances: the closing of nearly 2,000 automobile dealerships. Dealers often are keystones
of their communities, “with some of the better jobs available,” said Paul Taylor, chief economist of the National
Automobile Dealers Association in Virginia. Dealers collect taxes on auto sales, parts and repairs. Their
employees pay state income taxes in most states. Source: Stateline.org

Chrysler axes 87-year-old Pa. franchise, spares more modern neighbor
Two very different Chrysler dealerships, separated by just seven miles in southeastern Pennsylvania, are facing
two very different fates. One of these two dealerships got bad news and the other good news from Chrysler May 14
when the bankrupt automaker notified nearly a quarter of its 3,200 dealers that they would be dropped from the
Chrysler family.Source: MSNBC.com

The large supply of inventory, 120 days versus the ideal 60-day supply, has led to the escalation of incentives,
says Paul Taylor, chief economist with the McLean, Va.-based National Automobile Dealers Association, or NADA. "In
many cases, the deals are tremendous," he says. "The incentives that are available are stronger than they've ever
been and dealers are trying very hard to get cars sold as well."Source: Bankrate.com

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